Seaside escapes come in all varities

European specialist taps promising niche
NINA SUEBSUKCHAROEN

Rayong- Escaping the constricted business environment of Europe to start up a real estate agency in Thailand is a daring step but Jens Brochner Nielsen, the CEO of D2 Real Estate, seems to take the challenge in stride.

During a recent trip to see some seaside property in Rayong, Mr Nielsen said he opted to come to Thailand because it's less stressful, not to mention less costly, to I'un a business here than in Europe.

''In Europe it's more or less impossible to run a business because there are so many regulations about everything. You try to do everything correctly but you cannot do everything correctly because the regulations go against each othery'' said the native of Denmark.

ln the very competitive Thai real estate arena, Mr Nielsen's company has an interesting niche focusing on seaside properties. Some are off the usual and well-trod tourist track but have considerable appeal, such as some properties in Rayong.

At Wang Kaew Park there were four to five residential condominium units for sale right next to a private beach. Called Kaps Creative, the low-rise building consists of 48 units and although it does have a weather-beaten look, the breathtaking setting in the natural parkand the attractive price -- unfurnished or semi-furnished units of 80 to 90 square metres are one million to 1.6 million baht -- make it a promising opportunity. The price goes up if the buyer chooses to let D2 furnish the unit with Balinese furniture.

Perched on a hillock in the park is another low-rise condominium building called Kaps Mountain, with 22 duplex and triplex units.

Mr Nielsen said 90% of his customers were foreigners. The key reason Americans and Europeans are interested in property in Thailand is the dramatic rise in the cost of living in their own countries, while retired people can make substantial savings by coming here.

"I have observed more retired people or people who will retire in the next 10 years starting to sell property in Europe and coming to buy here,'' he said.

Mr Nielsen believes that the Thai property market, except for some particular areas where products are overpriced, is generally quite attractive. For this reason he thinks more European and American retirees will come to Thailand, even if they only spend part of the year here.

After doing business in Thailand for just over a year, MrNielsen observes franklyt that the local market is a difficult one because it is not very organised. Customers frequently cannot get the kind of service they need, he says, and sellers will go behind the real estate agent's back to seal a deal with the buyer directly in order to cut out thc commission.

"We can see from our own customers. Many customers try to find out where the property is going and they try to negotiate with the owner directly,'' he said.

While some of Mr Nielsen's buyers insist on acquiring property in Phuket, an island they associate with peace and romance, others want to be located in a resort with easy access to Bangkok.

He is a little apprehensive about the Phuket property market, expecting it to slowdown, not onlybecause of the impact the tsunami had on the island's economy but also because he believes demand for villas at 20-40 million baht is finite.

''But there are not that many people who choose to come to Thailand who can afford this big an investment,'' he said.

''The market has slowed down and people all say it's because of the tsunami, but in my opinion, the tsunami is only 40% of the reason, 60% is overly expensive development.''

For this reason he expects more foreign property buyers to flock to Cha-am, Hua Hin, Jomtien, Sattahip and Rayong. He has observed that no one nationality prefers any one of these resorts over the others, with a big mix of buyers and holiday makers in all of them.

''Cha-am and Hua Hin are very popular because they have so many good golf courses, it's still not that touristy and there is a coast line. when we go to Jomtien and Pattaya, it's completelydifferent clients so each place has its own particular potential customers.''

Rayong has still to register on foreigners' radar, but he expects this will change over the next 10 years because the province's beaches are of high quality and it has some of the best water. In fact, it's the best resort closest to the new airport - about two hours' drive,'' he said.

Some large real estate developers are promoting residential projects in Jomtien and Pattaya but Mr Nielsen said they could face some difiiculty selling units in the initial stage because a lot of people are hesitant about committing to condos that may take two to four years to build.

But once the developments are completed the units will be snapped up quickly because there is an undersupply of condominiums in the resort city.

Mr Nielsen cautions investment-minded purchasers who do buy units off-plan in Pattaya not to expect a 20-30% jump in values the day the project is completed.

Overall, though, he is bullish about Pattaya which will benefit from a direct rail connection to the new airport if the authorities carry through with the idea.

"We cannot close our eyes. Pattaya will be the area with one of the strongest developments and we expect Pattaya to be Thailand's next biggest city in 2010." he said.

from: Bangkok Post 2005-08-15